Form 4: Kennedy Lewis Boosts Kodak Stake with Preferred Stock Buy

Kennedy Lewis entities acquired 1 million shares of Eastman Kodak's 4.0% Series B Convertible Preferred Stock from third-party sellers on December 5, 2025.

Summary

• Kennedy Lewis Management LP and its affiliated funds (Kennedy Lewis Capital Partners Master Fund III LP, KLIM Delta HQC3 LP, Kennedy Lewis (EU) SPV LP, and KLCP Co-Investment Opportunities III LP) purchased 1,000,000 shares of Eastman Kodak Company's 4.0% Series B Convertible Preferred Stock.
• The transaction occurred on December 5, 2025, through privately negotiated transactions with several third-party sellers.
• The purchase price for the Preferred Stock was $101.50 per share.
• Each share of Preferred Stock has a liquidation preference of $100 and is entitled to cumulative dividends payable quarterly in cash at a rate of 4.0% per annum.
• The Preferred Stock is convertible into Eastman Kodak common stock at a rate of 9.5238 shares of common stock per preferred share, subject to anti-dilution adjustments.
• A beneficial ownership limitation prevents conversion if a Fund, with affiliates, would beneficially own in excess of 4.99% of the common stock then outstanding, though this limit can be adjusted with 61-days' prior written notice.
• The Issuer has the right to cause mandatory conversion of the Preferred Stock into common stock if the common stock's closing price equals or exceeds $14.50 for 45 trading days within a 60-consecutive trading day period.
• The Preferred Stock is subject to mandatory redemption by the Issuer on May 28, 2026 (91 days following the fifth anniversary of its original issue date of February 26, 2021), at a redemption price equal to the liquidation price plus accrued and unpaid dividends.
• Following the transaction, the Kennedy Lewis funds beneficially own 1,000,000 shares of Preferred Stock, convertible into approximately 9,523,798 shares of common stock.
• Darren Richman, an effective control person of Kennedy Lewis, serves on Eastman Kodak's Board of Directors, and other reporting persons are deemed directors by deputization.

Sentiment

Score: 7

Explanation: The acquisition of a significant block of convertible preferred stock by an insider and major shareholder like Kennedy Lewis indicates a strong vote of confidence in Eastman Kodak's long-term prospects. While not a direct capital injection, it signals a positive outlook from a sophisticated investor with board representation, balancing income generation with equity upside potential.

Positives

• Increased stake by a significant institutional investor (Kennedy Lewis) and its affiliates, indicating continued confidence in Eastman Kodak's future.
• The acquisition of convertible preferred stock provides a fixed income stream (4.0% cumulative dividends) while offering upside potential through conversion to common stock.
• The purchase from third-party sellers suggests market liquidity for the preferred shares.

Negatives

• The transaction was with third-party sellers, not a direct investment into the company, so it does not provide new capital to Eastman Kodak.
• The beneficial ownership limitation of 4.99% on common stock conversion could restrict the immediate full conversion of the preferred shares, though it can be adjusted with notice.

Risks

• Conversion Limitation: The 4.99% beneficial ownership limitation restricts the immediate full conversion of preferred shares into common stock, potentially limiting the ability to fully realize upside from common stock price appreciation without prior notice.
• Mandatory Redemption: The preferred stock is subject to mandatory redemption by the Issuer on May 28, 2026, which could limit the long-term holding period for the investor if the Issuer chooses to redeem.
• Mandatory Conversion: The Issuer can force conversion into common stock if the common stock price reaches $14.50 for a specified period, potentially diluting the common stock or forcing the investor to convert at a less opportune time.
• Market Price Volatility: The value of the convertible preferred stock is influenced by the underlying common stock price, which is subject to market volatility.

Future Outlook

The filing does not contain explicit forward-looking statements or guidance from Eastman Kodak management. It details a past transaction by an insider.

Management Comments

• For purposes of Section 16 of the Securities Exchange Act of 1934, each of the Adviser, KLM, Kennedy Lewis, Fund III GP, Holdings II, David Chene, and Darren Richman disclaims beneficial ownership of the securities of the Issuer held directly by the Funds except to the extent of its or his pecuniary interest therein, and this report shall not be deemed an admission that any of the Adviser, KLM, Kennedy Lewis, Fund III GP, Holdings II, David Chene or Darren Richman is the beneficial owner of such securities for purposes of Section 16 or any other purpose.
• Darren Richman, an effective control person of each of Kennedy Lewis Investment Management LLC and Kennedy Lewis Investment Holdings II LLC, serves on the Board of Directors of Eastman Kodak Company (the "Issuer"). By virtue of their representation on the Board of Directors of the Issuer, for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, each of the reporting persons other than Mr. Richman are deemed directors by deputization of the Issuer.

Industry Context

This transaction reflects an institutional investor's strategic positioning within a company like Eastman Kodak, which has undergone significant transformation. The acquisition of convertible preferred stock is a common strategy for investors seeking both income and equity upside in companies that may be in a turnaround phase or have specific growth catalysts. It suggests a belief in the long-term value of KODK, despite the transaction being with third parties.

Comparison to Industry Standards

• The acquisition of convertible preferred stock by a significant investor like Kennedy Lewis is a common investment strategy, particularly in companies with potential for capital appreciation but also a desire for downside protection through fixed income.
• The 4.0% dividend yield on the preferred stock is competitive, especially when considering the potential for conversion into common equity.
• The beneficial ownership limitation (4.99%) is a standard provision often included to avoid triggering certain regulatory thresholds or change of control provisions.
• The mandatory conversion trigger price of $14.50 for common stock provides a clear benchmark for when the issuer might force conversion, which is a typical feature of such instruments.

Corporate Governance

Related Party Transactions

• The transaction involves Kennedy Lewis entities, which are significant shareholders and have board representation (Darren Richman is a director, and other entities are deemed directors by deputization) in Eastman Kodak Company. The purchase of 1,000,000 shares of 4.0% Series B Convertible Preferred Stock was from third-party sellers.

Stakeholder Impact

• Shareholders: The increased stake by a major institutional investor could be seen positively, potentially signaling confidence and stability. However, future conversion of preferred stock could lead to dilution of common shareholders.
• Creditors: The preferred stock has a liquidation preference, ranking it above common equity in a liquidation scenario, but below senior debt. The fixed dividend payments represent a commitment from the company.

Next Steps

• The Issuer may exercise its right to mandatorily convert the Preferred Stock into common stock if the common stock price meets the $14.50 threshold for 45 trading days within a 60-day period.
• The Preferred Stock will be subject to mandatory redemption by the Issuer on May 28, 2026.
• The Funds may increase or decrease their beneficial ownership limitation with 61-days' prior written notice to the Issuer.

Key Dates

Recommendation

While the increased stake by Kennedy Lewis, a sophisticated investor with board representation, signals confidence in Eastman Kodak, the transaction itself is an acquisition from third-party sellers and does not inject new capital into the company. The convertible preferred stock offers a balanced risk-reward profile with fixed income and equity upside, but the beneficial ownership limitations and potential for mandatory conversion/redemption introduce complexities. Given these factors, a "hold" recommendation is appropriate, acknowledging the positive signal from the insider purchase while recognizing that the direct impact on the company's operational or financial performance is indirect. Investors should monitor the company's performance and the common stock price relative to the $14.50 mandatory conversion trigger.

Keywords

Eastman Kodak, KODK, Kennedy Lewis, Convertible Preferred Stock, Beneficial Ownership, Insider Transaction, Form 4, Equity Investment, Corporate Governance, Preferred Shares, Dividends, Stock Conversion